Wen Bottom?
FOMC Recap
This week, investors were provided with one of the bigger “head-fakes” in recent history. The May FOMC meeting took place on Tuesday and Wednesday, after which Jerome Powell announced a 50-bps rate increase to the target Fed Funds rate and plans to commence with the balance sheet runoff less than a month from today. While these measures were largely priced in, his statements did take the risk of a 75-bps rate hike at the next meeting off the table. As a result, equities, and other risk assets, including crypto, pumped into the market close on Wednesday. Unfortunately, the bounce was short-lived, as the Dow went on to have its worst day since 2020 on Thursday. Consequently, most risk assets plummeted, including bitcoin, which sank over 8% intraday.
Source: TradingView (As of 6pm 5/5/22).
The weekly charts across all crypto sectors are red, with the more speculative areas bleeding more than currencies and smart contract platforms. We have noted over the past several weeks that we think the near term will continue to be tough sledding for names farther out on the risk curve.
Interesting to note – currencies performed worse than smart contract platforms and centralized exchange tokens. Upon reviewing liquidations data, the underperformance of currenc...Unlock this article by joining our Community!
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